When Los Angeles rolled out RecycLA in 2017, a new commercial trash pickup program, it was designed to make the city cleaner and greener. But it came with higher prices, add-on fees, and missed pickups. The sticker shock led to hundreds of complaints and lawsuits.
Now the city and haulers have agreed to a settlement that gives millions of dollars in refunds to customers -- and effectively makes recycling free for businesses, condominiums, and large apartment buildings.
The city's Board of Public Works approved changes in the haulers' contracts on Friday.
HOW DID THE RECYCLA PROGRAM GET OFF TO SUCH A ROCKY START?
When Los Angeles rolled out the new commercial trash pickup program, there were loud and bitter complaints from businesses. Lots of customers rebelled.
Some even sued, like Malcolm Bennett, head of the Minority Apartment Owners Association.
Members were seeing trash bills increase 30 to 100 percent, due to the more expensive equipment and new fees for recycling bins, Bennett said. There were also added charges for things like having a trash truck drive up a long driveway, or use an intercom to get past a locked private gate.
"We don't drive Mercedes. We don't drive Lexus or expensive cars, because the industry we are in does not have that big a profit margin. So we really didn't feel that we needed a Rolls Royce trash company," Bennett said. "We need a company that provided service at a reasonable price."
The landlords care about the environment, Bennett said, but their buildings are rent-controlled -- and they want to pass at least some of the cost of the increased trash bills on to their tenants.
WHAT EXISTED BEFORE THE RECYCLA SYSTEM BEGAN IN MID-2017?
Dozens of companies would compete with each other before, and prices could be low. There was some regulation -- haulers had to register with the city and pay recycling fees based on the amount of garbage they dumped -- but aside from that, it was uncoordinated and inefficient.
For example, a residential street with apartments or condos might see several different companies' garbage trucks rumbling by every day. That created safety and noise problems. Garbage bins would be rolled out on different days, so there would never be a day when bins weren't blocking bike lanes on some streets.
Those garbage trucks might be new, clean, and driven by well-trained union drivers -- or they could be old and dirty. Ther drivers might be paid low wages and have little training.
Also, L.A. didn't have a uniform recycling program for apartments, condos, and businesses.
Environmentalists, including L.A. City Council members, wanted a commercial garbage hauling system that would be cleaner and greener, with more recycling and less truck traffic in residential areas. They wanted a system where the businesses and multi-family buildings that created all the trash, traffic, noise, and emissions would be made to pay the full cost of reducing the burdens that the trash produces.
HOW DID RECYCLA CHANGE THINGS?
The city got chopped into 11 zones. Trash companies competed for the right to exclusively serve one or more of those areas. It's a franchise system, and Los Angeles is the largest city to try the idea.
Seven companies won franchises, and the service rolled out in July 2017 -- to immediate objections.
WHAT PROBLEMS CROPPED UP IN THE BEGINNING?
The initial handover of accounts from dozens of companies who were losing their business to seven companies who were getting exclusive franchises was clumsy. There were hundreds of missed pickups at the outset, and the higher prices came as a shock.
The city's rules required the winning bidders to have clean-fuel trucks, and to offer recycling. That makes the service cost more than the dozens of cheaper companies that were pushed out of the city.
Small businesses and owners of apartment buildings and condos were now in a monopoly situation. There were no other competing companies to turn to if their assigned trash hauler did a poor job or charged more than they were comfortable paying.
For example, the owner of multiple buildings located in several different trash franchise zones couldn't bundle their properties together to get a quantity discount, Bennett said.
On top of the price and lack of competition issues, the city's contract with the haulers let them charge for all kinds of add-ons that businesses rejected as excessive. For example, if a garbage truck driver needed to open a gate, or use a key or an intercom to get onto a property to get to the garbage bin, there would be extra charges.
Or if the apartment, condo tenants, or a business's employees contaminated their recycling bin with the wrong items, or nasty waste that spoiled the value of the recyclables, there would be more charges.
WHAT'S CHANGING IN THE RECYCLA PROGRAM TO ADDRESS THE COMPLAINTS?
The city and haulers will split the cost of refunding charges for recycling services already provided since the program started in mid-2017, and they will absorb the costs in coming years, making recycling effectively free.
The city's first-year cost of the refunds and waiver of some service charges will run about $9.1 million, said Dan Meyers, who oversees the commercial franchise division within L.A. Sanitation. Haulers agree to put up an equal amount.
Subsequent years' costs are expected to start at around $7 million for the city annually, rising as the amount of recycling increases.
The goal: to remove barriers to recycling and provide more education to tenants and businesses about how to properly recycle, ultimately increasing the amount that gets recycled and reducing the volume of trash taken to landfills.
And while a 3.6 percent cost of living increase was applied to rates in January, the city and haulers agreed to delay an additional 3 percent price increase until 2020.
